U.S. Supreme Court to Review EPA Greenhouse Gas Permitting Requirements for Industrial Facilities

On Tuesday, the United States Supreme Court agreed to consider challenges to the Environmental Protection Agency's (EPA) application of Clean Air Act permitting requirements to greenhouse gas emissions from stationary sources.

The six petitions for certiorari invited the Court to take up a long list of issues, including the extent of EPA’s authority to regulate greenhouse gas emissions.
The Supreme Court, however, limited its review to a single question: “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”

Although the Supreme Court’s decision to consider this issue could potentially be a setback for EPA’s ability to regulate greenhouse gas emissions from certain industrial facilities, the limited scope of the Court’s review means that much of the agency’s efforts to curb greenhouse gas emissions will remain unaffected. For example, the Supreme Court is NOT reviewing EPA’s determinations that:

• Greenhouse gases may be regulated as a pollutant under the Clean Air Act;

• Greenhouse gases are a threat to public health (Endangerment Finding); and

• Regulation of vehicle tailpipe pollution is appropriate under the Clean Air Act (Tailpipe Rule).

The sole issue before the Court will be whether EPA’s regulation of greenhouse gases from vehicles automatically triggers permitting requirements for stationary sources under other provisions of the Clean Air Act.

Under the Clean Air Act, any facility considered a “major emitting facility” that undergoes construction or modification must obtain a permit and install the “best available control technology” (BACT) for any pollutant subject to regulation under the Act. 42 U.S.C. § 7475(a). A “major emitting facility” is defined in the Act as a stationary source that may emit a threshold amount of “any air pollutant.” 42 U.S.C. § 7479(1).

EPA interprets “any air pollutant” to mean “any air pollutant regulated under the Clean Air Act.” Thus, under EPA’s reasoning, once EPA began regulating greenhouse gases as air pollutants for new motor vehicles, all stationary sources that had the potential to emit the threshold amount of greenhouse gases would be required to install BACT and apply for a permit.

The D.C. Circuit Court of Appeals considered this issue in its 2012 decision in Coalition for Responsible Regulation, Inc., et al., v. United States Environmental Protection Agency, 684 F.3d 182 (D.C. Cir. 2012), and upheld EPA’s interpretation of the Clean Air Act, holding that the text of the statute was unambiguous and "compelled" EPA’s interpretation. The Supreme Court will now review this aspect of the decision. Oral arguments are likely to be held in early 2014, and a decision is expected by June 2014.

Although the Court’s decision to review this single issue is concerning, it is important to recognize that, regardless of the outcome of the Supreme Court case, important programs for reducing greenhouse gas emissions will remain in place.